In November 2012 the Secretary of State for Energy and Climate Change published a revised draft of the Energy Bill, updating proposals made in May 2012.
You can find out more in our partner guides to the draft as a whole and our guide to those changes related to Electricity Market Reform (EMR).
This guide deals with nuclear regulation in the draft Energy Bill.
Part 2 of the Energy Bill is intended to deliver a longstanding commitment from Government to place the current interim Office for Nuclear Regulation (ONR) onto a statutory footing. This shift is intended to give clarity and certainty to the nuclear regulator’s remit and strengthen its ability to properly and sustainably resource itself.
This is an area of the Bill which has not particularly changed since the May draft as it was not an area scrutinised by the Energy and Climate Change Committee or one which drew much criticism following the May draft of the Bill. The proposals do not drastically alter the existing regulatory regime or the standards to which the nuclear industry must perform. It is, however, a welcome indication of the Government’s commitment to delivering a world class regulator. Companies involved in developing plans for new nuclear power stations may also see this as a demonstration of the government’s continued support for a new nuclear renaissance in the UK.
A brief history
The 2008 document Nuclear Regulatory Review Private Advice and Reasoning Observations by Tim Stone for the Secretary of State for Energy and Climate Change made various recommendations to Government on nuclear safety matters.
Two key recommendations were for Government to create a governing body for the nuclear regulator and to ensure that it was structured to give it the financial and organisational flexibility needed to meet its business needs on a sustainable basis. In late summer 2009 the Government consulted on proposals for an ONR that would be established by legislation. Work then began on a Legislative Reform Order that would bring in the necessary changes. Due to a lack of Parliamentary scrutiny time prior to the 2010 general election the Order was not laid before Parliament.
In February 2011 Minister of State Chris Grayling publicly committed the Government to “bring forward legislation to create a new independent statutory body outside of the HSE to regulate the nuclear power industry”. As a signal of the Government’s commitment to this goal, an interim ONR was created in April 2011 as an agency of the Health and Safety Executive (HSE). This brought together the nuclear regulatory functions that were, at that time, being carried out by the Nuclear Installations Inspectorate, the Office for Civil Nuclear Security and the UK Safeguards Office.
In October 2011 the functions of the Radioactive Materials Transport Team were also brought within the interim ONR. May 2012's draft Energy Bill contained clauses delivering the policy commitment relating to the statutory ONR. These provisions have so far proved relatively uncontroversial in the context of the wider Bill with the pre-legislative scrutiny process that was undertaken by the Energy and Climate Change Committee focusing on other policy areas within the Bill, such as Contracts for Difference. As a result, the Government’s November 2012 response to the Committee’s report did not deal with the ONR provisions either.
The transition to a statutory ONR is intended to create a transparent regulatory arrangement, as opposed to the current network of agreements that transfer responsibilities from the relevant Secretary of State (SoS) to the HSE and then on to the interim ONR. It will also provide the statutory ONR with an increased flexibility in financial and employment arrangements, which will in turn help the statutory ONR to fully meet its resourcing needs. The importance of these goals has been underlined by the awful events at Fukushima and the subsequent report produced by the Chief Nuclear Inspector as to the causes of that accident.
The statutory ONR
In the main, the provisions set out in the Energy Bill reflect existing legislation and do not present a significant departure from the status quo. Key changes include establishing the Chief Nuclear Inspector as a statutory post, removing the statutory ONR staff from the Civil Service, thus increasing flexibility as to what terms and conditions they work under, and introducing requirements for the production of strategic documents by the statutory ONR thereby giving more clarity to the nuclear industry as to the statutory ONR’s regulatory aims. These documents include a five year strategy, an annual plan, an annual report and a regular report by the SoS to Parliament on the exercise of SoS powers over the statutory ONR, which is designed to help ensure an appropriate level of independence of the statutory ONR.
The new look ONR will be specifically granted statutory regulatory functions in five areas: nuclear safety; nuclear security; nuclear safeguards; the transportation of radioactive material by road, rail and inland waterway, and conventional health and safety on nuclear sites. It will have an overall set of purposes that reflect these areas and which will act as a form of mission statement as well as a boundary for the various powers and duties set out in the Energy Bill.
The statutory ONR will be a body corporate and will consist of up to four executive members, including the Chief Nuclear Inspector, as well as a Chief Executive Officer and up to seven non-executive members. The Chair will be one of the non-executive members. There will be a security expert non-executive member and the HSE may appoint one of its non-executive members to the statutory ONR Board, and vice versa, to help ensure consistency in the regulation of health and safety matters both on and off nuclear sites.
Schedule 7 sets out the detail relating to the statutory ONR as an organisation, such as detail on the powers to delegate matters to staff and committees as well as to indemnify inspectors, for instance. The freedom that the statutory ONR will have to set the terms and conditions for its staff will be an important plank in allowing the Government and the statutory ONR to deliver the recommendations of the Stone Review.
Suitably qualified inspectors can be appointed by the statutory ONR. Schedule 8 sets out the detail as to the powers that inspectors will have. These are broadly similar to those contained in the Health and Safety at Work Act 1974.
The statutory ONR will be subject to various duties. These include a broad duty to do whatever it considers appropriate for its purposes, a duty which links to the five key areas that the statutory ONR will be regulating. They also include requirements as to the provision of information and advice. A key duty will be a requirement to enter into cooperation and information sharing arrangements with the HSE. As the HSE will continue to regulate health and safety matters outside of nuclear sites, this will be vital in ensuring that a consistent regulatory approach is taken across the board.
The SoS is given various powers under the Energy Bill. Broadly these mirror powers available under existing legislation, in particular the Health and Safety at Work Act 1974. An example of a power that the SoS will have is the power to make regulations in areas such as nuclear safety and security. These regulations can be introduced in response to proposals from the statutory ONR or on the basis of the SoS’s own views on the need for new regulations. The SoS will also have powers of direction over the statutory ONR in certain circumstances. Any such directions, with certain security-related caveats. must be put in front of Parliament, again to help guard the independence of the statutory ONR.
The majority of the detail of the provisions is set out in schedules, rather than the main Bill. Taken together these provisions look set to combine to improve the effectiveness of the current regulator without alarming the regulated community with significant changes to the current way in which the regulatory regime operates on the ground.